Insurance Expert Permitted to Opine on Industry Best Practices

    Zach Barreto

    Written by
    — Updated on May 4, 2021

    Insurance Expert Permitted to Opine on Industry Best Practices

    Court: United States District Court for the Western District of Pennsylvania
    Jurisdiction: Federal
    Case Name: Three Rivers Hydroponics, LLC v. Florists’ Mut. Ins. Co.
    Citation: 2020 U.S. Dist. LEXIS 12644

    In this insurance dispute, the plaintiff’s insurance expert witness opines on industry standards for bad faith claims. The defendant claims this is not a technical topic that requires expert testimony in the first place. They also claim the expert is offering legal conclusions.

    The court must intervene on the topic of fit for the case. It determines this is a specialized enough topic that the jury would benefit from the expert’s opinions. The expert’s only error was in legal conclusions and opining on broken laws.

    Facts

    The plaintiff suffered a small fire in their commercial greenhouse that destroyed the water sterilization system. They attempted to file a claim with their insurance provider, the defendant, but it was denied. As a result, the plaintiff filed the suit alleging breach of contract and statutory bad faith. The plaintiff retained an insurance expert witness to opine on insurance industry standards and practices.

    The Plaintiff’s Insurance Expert Witness

    The plaintiff’s insurance expert witness was a licensed California lawyer. He had worked as a policy consultant for the insurance industry for 18 years. He had testified as an insurance expert witness in over 15 states.

    The defendant tried to throw out the insurance expert witness’s testimony. They argued that his legal opinions were of no use to the jury. At the very least, the defendant demanded that the expert be precluded from testifying about whether the defendant broke any law and on his interpretation of the plaintiff’s insurance policy.

    The defendant further argued that the expert’s testimony did not fit the claim at issue. They explained that bad faith is generally an applied legal concept and does not require technical knowledge to help the jury. The defendant cited Bergman v. United Servs. Auto. Ass’n, McCrink v. Peoples Benefit Life Ins. Co., and Dattilo v. State Farm Ins. Co. to argue that there was no need to provide expert testimony to prove a bad faith insurance claim. None of those cases, however, declare that expert testimony is prohibited in such circumstances.

    The plaintiff responded that the jury would need help to understand reasonable behavior in an agricultural insurance claim. They explained that the expert witness testimony’s intent was to clarify insurance standards when crop loss and ozone equipment are involved.

    Discussion

    The court noted that the standard for assessing an expert’s fit for a case, although higher than their relevance, was not very high, citing Daubert. It further noted the defendant cited cases that did not declare that expert testimony is prohibited in bad faith insurance claims.

    The court agreed with the plaintiff and found that the expert’s testimony would assist the jury in establishing what reasonable conduct is in a bad faith insurance dispute. It believed the expert’s extensive experience as an insurance claims adjuster would help in providing guidelines as to what constitutes reasonable claims handling and adjusting conduct. The court did, however, prohibit the expert from testifying about his legal expertise and whether the defendant broke any law.

    Ruling

    The court granted in part and denied in part the defendant’s motion to exclude the insurance expert witness’s testimony.

    Key Takeaways for Experts

    This case highlights the court’s role in assessing expert fit and usefulness to the jury. The expert was clearly qualified but it was up to the court to determine if his testimony would be helpful information for the jury to have. The only misstep here was offering legal conclusions.

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